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I-Team: Addiction Clinic Accused of Inflating Medicaid Bills

One of the busiest drug counseling centers in New York schedules unnecessary and sometimes unproductive appointments for its clients, inflating the Medicaid bills that get passed along to the taxpayer, former clients and employees of the center allege.
According to accounts from recovering addicts who spoke to the I-Team, the Brooklyn outpatient clinic, New York Service Network (NYSN), has repeatedly scheduled them for individual and group counseling sessions, even when those appointments were not recommended by counselors or interfered with job interviews and work schedules. Chris Glorioso has more on the story. (Published Wednesday, Oct. 9, 2013)

One of the busiest drug counseling centers in New York schedules unnecessary and sometimes unproductive appointments for its clients, inflating the Medicaid bills that get passed along to the taxpayer, former clients and employees of the center allege.

According to accounts from recovering addicts who spoke to the I-Team, the Brooklyn outpatient clinic, New York Service Network (NYSN), has repeatedly scheduled them for individual and group counseling sessions, even when those appointments were not recommended by counselors or interfered with job interviews and work schedules.

“If I would have taken a job during the day, I would have been discharged,” said one recovering addict who didn’t want his identity revealed.

Several recovering addicts told the I-Team similar stories of being ordered by their landlord -- who operates a Brooklyn sober home -- to attend four or five sessions a week at NYSN, even after counselors reduced their appointment load because they were making good progress.

“They knocked me down to twice a week,” said former NYSN client Lillian Imbert. “When the owner of the sober home heard that, he made them put me back up to four times a week.”

Imbert and other recovering addicts say they were threatened with eviction from the sober home if they did not bring back tickets showing they had swiped their Medicaid benefits card at the outpatient clinic.

One former client, who asked to be called “Mr. A,” told the I-Team he was ordered to go to drug counseling sessions even though he has never struggled with substance abuse or addiction.

“I did not have a drug problem. I did not have an alcohol problem, but as long as I was a resident in any of the houses owned by these people, you are forced to go.”

Mr. A said he ended up at the sober home after he lost his job making marketing phone calls for an insurance broker and after he wore out his welcome at a friend’s home.

“What I find very strange is that the first thing they do is get your Medicaid card to find out if it’s valid. There is never a single one-on-one interview with a specialist to determine if you really do have a drug problem.”

Contacted by phone, the owner of NYSN, Dr. Lazar Feygin, said he has no relationship with sober homes that supply many of his clients.

“I have nothing to do with sober homes at all. That is absolutely a lie.” Feygin said. “We get clients
from many sources.”

Pro Publica was first to expose the alleged relationship between NYSN and sober homes, also called three-quarter homes. Investigative reporter Jake Bernstein found NYSN is the seventh busiest non-methadone drug clinic in the state, and gets nearly all of its clients from sober homes. The Pro Publica report found sober home properties operated by Yury Baumblit referred more Medicaid patients to NYSN than any other sober home operation. NYSN billed New York’s Medicaid program $3.2 million in 2012, according to Pro Publica.

Baumblit did not return the I-Team’s request for comment. Contacted at her home, Baumblit’s wife Rimma said she is co-owner of the sober home business and neither she nor her husband get any personal benefit for making Medicaid referrals to NYSN.

“I am a landlord. That’s it. Nothing else.” she said.

In 2010, lawyers from MFY Legal Services, a nonprofit that represents low-income tenants against New York City landlords, filed a class action suit against Yury Baumblit alleging he illegally harassed sober home residents, provided substandard living conditions, and forced them to sign away their rights protecting against unlawful eviction.

The lawsuit was dismissed by a judge who ruled Baumblit was exempt from traditional landlord-tenant law because he operates a “transitional housing program.”

Attorneys Matthew Main and Tanya Kessler are now appealing the decision. They argue sober homes should be treated as plain landlords -- and they have no right to order tenants to swipe their Medicaid cards at any particular clinic.

“It’s no different than my landlord or any landlord requiring you to go on a diet,” Main said.

A 2003 bulletin issued by the Office of Alcoholism and Substance Abuse Services says programs must obtain a state license if they include a “referral or mandate that residents attend an authorized or certified chemical dependence service(s) as a condition of continued stay in the residence.”

The I-Team could find no such license under Yury Baumblit’s name or his wife’s name.

A lawyer for NYSN, Joseph LaBarbera, also denied his clients are guilty of wrongdoing.

“My clients have no interest in the three-quarter homes as owner, operator or otherwise,” he said. “As to the patient complaints, facilities such as NYSN must often be content in knowing that they help their clients in their efforts to overcome their problems.”

LaBarbera also said NYSN’s rate of graduating recovering addicts exceeds that of comparable facilities in New York City.

In 2011, the New York Health Department forced NYSN to pay back more than $2.5 million in Medicaid overpayments for drug counseling sessions that occurred between 2003 and 2007. The clinic appealed that decision but it was denied. Feygin told the I-Team most of the improper bills were a result of honest paperwork errors like counselors forgetting to sign documents.

But even while NYSN was working to pay its debt from the previous Medicaid overpayments, a former counselor alleged more inflated Medicaid bills. In June of last year, Maxine Mathis emailed state health regulators to report a number of irregularities at the clinic, including poor documentation and “excessive Medicaid billing.”

Mathis said the owner of the outpatient program insisted he "needed to maintain the numbers because the numbers of people attending the program were paramount to his ability to make the money.”

When Mathis recommended some of her counseling clients have fewer appointments because they were progressing in the program, she also heard stories that they were threatened by Yury Baumblit’s sober home staff.

“I’ve had several clients who have begged me not to decrease their schedule,” Mathis said. “Those individuals would shudder at the fact that ‘I’m going to be evicted, where else am I going to go?”

Mathis left her employment at NYSN after a dispute with Dr. Feygin, the clinic owner. She says the managers branded her as “difficult” because she insisted on ethical billing practices. LaBarbera did not answer the I-Team’s questions about her exit from the company.

Pro Publica’s investigation into NYSN also found other former employees who have made official complaints to the state about Medicaid billing and the clinic’s relationship with sober homes. Jannette Rondo, a spokeswoman for the New York Office of Alcoholism and Substance Abuse Services told the I-Team “the case has been referred to the NYS Attorney General’s Medicaid Fraud Control Unit.”

The Attorney General’s Office does not generally comment on the existence of ongoing investigations.
Lillian Imbert is no longer living in the sober home operated by Yury Baumblit. She says she is alcohol-free, getting her life back together, and earning income in the jewelry business. She hopes by speaking out, she’ll draw attention to a relationship between a clinic and a landlord that made her feel used.

“It made me feel very little," Imbert said.. That I had lost my dignity, basically. I had already lost my dignity and it was hard enough. But this was the icing on the cake.”